[Congressional Record Volume 151, Number 5 (Tuesday, January 25, 2005)]
[Senate]
[Page S484]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL:
  S. 157. A bill to amend the Internal Revenue Code of 1986 to permit 
interest on Federally guaranteed water, wastewater, and essential 
community facilities loans to be tax exempt; to the Committee on 
Finance.
  Mr. KOHL. Mr. President, I'm introducing a bill today that is aimed 
at helping rural communities build or improve essential community 
facilities such as shelters, nursing homes, hospitals, medical clinics, 
and fire and rescue-type projects. My bill would make it possible for 
project sponsors to accept certain USDA loan guarantees without risking 
the tax exempt status that enables them to finance these initiatives.
  Clarification of existing tax rules, as proposed in this bill, will 
provide certainty for project sponsors, help lower project costs for 
rural communities, and help deal with a backlog of loan applications 
for small communities.
  The needs are great in many rural communities. This measure will help 
communities help themselves and I look forward to working with the 
Senate Finance Committee on this important topic.
  I ask unanimous consent that the text of the measure be printed in 
the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 157

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TAX-EXEMPT INTEREST ON FEDERALLY GUARANTEED WATER, 
                   WASTEWATER, AND FEDERALLY GUARANTEED ESSENTIAL 
                   COMMUNITY FACILITIES LOANS.

       (a) In General.--Section 149(b)(3)(A) of the Internal 
     Revenue Code 1986 (relating to certain insurance programs) is 
     amended by striking ``or'' at the end of clause (ii), by 
     striking period at the end of clause (iii) and inserting ``, 
     or'', and by adding at the end the following new clause:
       ``(iv) any guarantee by the Secretary of Agriculture 
     pursuant to section 306(a)(1) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1926(a)(1)) to finance water, 
     wastewater, and essential community facilities.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
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